I have done a lot of research into GMA500 based devices. They are wonderful low powered devices, however they are hampered by a GPU that contains a PowerVR core from Imagination Technologies.

This particular GPU does also have some codec accelleration functions, however, to get them, you must use Intel's commercial drivers. The issue here is that due to a packaging mistake with the Intel EMGD drivers, the VA-API drivers needed for video accelleration were built against the wrong version of XCB, and thus it's not possible to get a working system with the right libraries to enable video accelleration. This sucks, because it is possible to patch Xine, mplayer, etc appropriately to use VA-API calls to get the needed acceleration functions. The drivers are built every six months, and am waiting for the next build before i can try again.

I am going through this mess right now, on an Archos 9 tablet that I am using for LinuxMCE research, which uses the same series chipset, as well as trying to use an O2 Joggler for the same purposes, again, same chipset.